Important Bankruptcy Terms to Know
The process of filing for personal bankruptcy is extremely complicated, and the U.S. Bankruptcy Code has many complexities that can be difficult for a consumer to understand with certainty. As such, it is important to have an experienced Oak Park bankruptcy attorney on your side from the very start of your case. At the same time, it is important to learn as much as you can about the consumer bankruptcy process. The following are some of the key terms that are used in consumer bankruptcy cases that can help you to understand more about the processes for different types of personal bankruptcy.
Automatic Stay
The automatic stay is an injunction that takes effect as soon as a person (or entity) files for bankruptcy. The injunction prevents creditors from continuing to take any debt collect actions against you (such as moving forward with an existing lawsuit) or initiating any new debt collect actions. The automatic stay applies to Chapter 7 and Chapter 13 bankruptcy cases, and to Chapter 11 cases when a consumer files under this chapter.
Chapter 7
Chapter 7 is a type of bankruptcy filing that is a form of liquidation bankruptcy. It is available to consumers and businesses. The process generally takes about four to six months, during which time non-exempt property is liquidated. At the end of the case, the consumer can receive a discharge.
Chapter 13
Chapter 13 is another type of bankruptcy filing for consumers that is a reorganization bankruptcy. This type of bankruptcy usually takes three to five years, during which time the consumer makes payments according to the terms of a repayment plan. Once the terms of the repayment plan have been completed, the debtor can receive a discharge of remaining eligible debts.
Discharge
In a bankruptcy case, a discharge is a permanent court order that releases the debtor from liability for specific debts.
Exemptions
Exemptions refer to specific types of assets that are protected from creditors in a bankruptcy case. Exempt assets cannot be liquidated in a bankruptcy case and that do not need to be included in a reorganization plan.
Means Test
When a consumer files for Chapter 7 bankruptcy, they must first pass the means test. This is a formula that shows that a debtor’s income and assets are low enough that a liquidation bankruptcy is appropriate.
Petition
The petition is the form you will file to initiate your bankruptcy case, along with schedules that provide information about your finances.
Trustee
In a bankruptcy case, the trustee is the person or entity that oversees or administers the case. Trustees have different roles depending upon the type of bankruptcy.
Contact a Bankruptcy Lawyer in Oak Park
If you are thinking about filing for bankruptcy, you should seek guidance from one of our experienced Oak Park bankruptcy attorneys. We can assess your financial circumstances to help you understand which type of bankruptcy is right for you, and we can guide you through the bankruptcy process, from determining your eligibility and filing a petition to your bankruptcy discharge. Contact the Emerson Law Firm to find out more about personal bankruptcy and to learn more about how we can help you.
See Related Blog Posts:
Debt Collectors Cannot Charge “Pay-to-Pay” Fees
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Automatic Stay
The automatic stay is an injunction that takes effect as soon as a person (or entity) files for bankruptcy. The injunction prevents creditors from continuing to take any debt collect actions against you (such as moving forward with an existing lawsuit) or initiating any new debt collect actions. The automatic stay applies to Chapter 7 and Chapter 13 bankruptcy cases, and to Chapter 11 cases when a consumer files under this chapter.
Chapter 7
Chapter 7 is a type of bankruptcy filing that is a form of liquidation bankruptcy. It is available to consumers and businesses. The process generally takes about four to six months, during which time non-exempt property is liquidated. At the end of the case, the consumer can receive a discharge.
Chapter 13
Chapter 13 is another type of bankruptcy filing for consumers that is a reorganization bankruptcy. This type of bankruptcy usually takes three to five years, during which time the consumer makes payments according to the terms of a repayment plan. Once the terms of the repayment plan have been completed, the debtor can receive a discharge of remaining eligible debts.
Discharge
In a bankruptcy case, a discharge is a permanent court order that releases the debtor from liability for specific debts.
Exemptions
Exemptions refer to specific types of assets that are protected from creditors in a bankruptcy case. Exempt assets cannot be liquidated in a bankruptcy case and that do not need to be included in a reorganization plan.
Means Test
When a consumer files for Chapter 7 bankruptcy, they must first pass the means test. This is a formula that shows that a debtor’s income and assets are low enough that a liquidation bankruptcy is appropriate.
Petition
The petition is the form you will file to initiate your bankruptcy case, along with schedules that provide information about your finances.
Trustee
In a bankruptcy case, the trustee is the person or entity that oversees or administers the case. Trustees have different roles depending upon the type of bankruptcy.
Contact a Bankruptcy Lawyer in Oak Park
If you are thinking about filing for bankruptcy, you should seek guidance from one of our experienced Oak Park bankruptcy attorneys. We can assess your financial circumstances to help you understand which type of bankruptcy is right for you, and we can guide you through the bankruptcy process, from determining your eligibility and filing a petition to your bankruptcy discharge. Contact the Emerson Law Firm to find out more about personal bankruptcy and to learn more about how we can help you.
See Related Blog Posts:
Debt Collectors Cannot Charge “Pay-to-Pay” Fees
Can I Change My Mind After I File for Bankruptcy?
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